The level of pollution at which the marginal benefits equal the marginal cost of cleaning up is always
A) the zero pollution level.
B) the optimal quantity of pollution.
C) the pollution maximum.
D) the pollution minimum.
Answer: B
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The government can meet its interest bill without having to levy taxes if it issues more bonds and if the
A) economy's real growth rate of output is greater than the real interest rate. B) economy's real growth rate of output is equal to the nominal interest rate. C) economy's real growth rate of output equals or exceeds its real interest rate. D) economy's nominal growth rate of output equals or exceeds its real interest rate.
When an economist states that a firm is earning zero economic profit, this statement implies that the firm
a. will be forced out of business unless market conditions change. b. is doing as well as it could in any other line of business. c. is earning a zero rate of return on its assets. d. could earn a higher rate of return in other industries.
Consumer surplus is the net economic benefit to consumers who are able to buy a good at a price lower than the highest price they are willing to pay.
Answer the following statement true (T) or false (F)
Net exports
A. are the smallest component of GDP. B. equal exports minus imports. C. have been negative in the United States since the mid-1970s. D. All of the choices are true of net exports.